What’s up guys? It’s Harry, I’m just editing the podcast right now. And it’s definitely going to be a good one. James and I have decided to take the podcast in a bit of a different direction, we’re going to be transitioning from the interview style to talking about the economy, the overall market, as well as small caps. Alex will also be joining us in the next episode, she’s also going to be joining us around once a month. And we’re going to be just talking about the economy, stuff that’s going on in the world. And as well, of course, with Alex, we’re going to be talking about some small cap shorts as well. So in this episode, again, we’re gonna be talking about the economy, the overall market smallcaps. And that’s going to be kind of the way that we’re doing this moving forward, as well. I would just like to say a quick thank you to all our supporters weekly, all our supporters kind of monthly, everyone who tunes in, I just like to say a huge thank you to you guys. And definitely let us know in the comments below of how you feel about this transition. If you’d liked this episode, some things to work on and stuff like that. So I just like to say thanks a lot. And let’s dive right in.
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Harry’s Thoughts on the Large Cap Market
James 1:09
What’s going on guys, we’re back with another episode, the After Hours Podcast. It is Sunday, July 24 2022. So everything we’re talking about, it’s going to be kind of revolved around this time. And yeah, so we’re gonna be talking a lot about like the large cap market this time, you know, overall market trends and everything like that. So let’s kind of dive into it. So, Harry, what have you been kind of noticing about the large cap market this last week?
Harry 1:37
For me, it’s been pretty, pretty stronger. I mean, all the way from like, you know, July 19. My birthday was actually June 18, I tweeted out, I thought it was market bottom for a little bit. And we ended up kind of rallying from 380 on the spy, we got to 400, then we kind of took a breather. I think, you know, a lot of people are starting to forget about the war, I think a lot of people are starting to kind of inflation startups kind of, it’s kind of becoming old news. It’s pretty irrelevant, but like everyone knows about it. Now everyone’s heard about it now. Everyone kind of understands its effects, I believe now. And so I think a lot of people are just saying to themselves, you know what, I think it’s time to put some money back in the market. The market, it has, you know, taken quite quite a hit, you know, since April since March. So I think that a lot of people are going to start trying to put money back to work. I know a lot of people are saying, oh, hedge funds are not buying, no one’s buying. But obviously, someone’s buying other than retail to make these kinds of types of moves. So for me, I’m pretty bullish. I know a lot of people are going to be shaking their heads going against me. But to me, I am pretty bullish. I know that a lot of the let’s say leader stocks have taken hits. And that is, you know, sign of, you know, things not being healthy. But for me, I am I’m just I’m pretty bullish because I think that, you know, for the most part, we have a ton of people thinking that we’re going to zero, which will never never fucking happen. And I just think that we’ve taken quite a hit due for a bounce pretty bullish.
James 3:15
Yeah, I think. I think a lot of major names have bottomed. I want to make any, like, major assumptions, but like, like this companies like Apple? Like I think a lot of them have, I think the there’s a lot of names like Tesla, that still could they have a lot of room to come down just because of how overinflated they were, especially during the COVID era, right where there was that cult following on some of these stocks. So as the air might take a little longer for them to come out. Just because you know, you look at a company like Tesla, and then you compare it to Apple and obviously apples way more sturdy as far as cash flow, cash on hand and all that stuff. And yeah, and the thing is, I think the indices are just gonna take a little bit longer to kind of bottom and really put in a meaningful kind of area support. Yeah, yeah. And I just, I think people are scared, you know, but it was I tweeted about it last week, and it was I think was last Thursday or something like that we’d go and I just I woke up into an Apple had taken a huge beating is that 143 bucks and I’m just thinking to myself, like, This is apple, you know, this company is not going anywhere until I walk outside and I don’t see people just staring at their iPhones or whatever. Yeah, I will never not have faith in that company. So that was something like for me I personally started buying at least a little bit just get my feet wet. And you know, it’s that’s it I think we are at a point where people are starting to get a little bit more confident because there was such fear like we hit max fear and Max like scared feeling that the market is gonna zero like you said. So you know.
Harry 5:00
And also a lot of big, big cap companies right now, you know, like you’re looking at Apple, you know, q3 earnings are going to come out, you know, they’re gonna slow hiring, they’re gonna slow spending, they’re not going to do as much research. I think that’s a lot of fear based stuff, you know, I guess like a lot of people, to me, the thing is, with recessions and stuff like that, in 2008, no one expected it, when things start to crash, no one really expects it. And for for a lot of people to be coming out expecting a crash or expecting this or that, to me, it’s just I’m a little weary, because the biggest panics, the biggest drops are going to be when people don’t expect it.
When People Get Caught on the Wrong Side of the Trade
Harry 5:43
And when people do expect it, and they start getting on the wrong side of the trade, and they it was just like, COVID, right. COVID market tanked. How many times did I hear people going off, you know, you know, all all spring all summer saying the market is it’s due for crash due for crashes, and it just kept going up and up and up. And I think that’s where we’re at right now. Where the market? Yes, it’s taken a beating. But a lot, a lot of people are continually saying, Oh, it’s gotta go lower, gotta go lower, gotta go lower. Right. And when we start rebounding, people get on the wrong side of the trade, they’re too convicted. We see it all the time on a low float squeeze, where people are saying, this is gonna go down, gotta go, gotta go down. People are caught on the wrong side, wrong side, wrong side. And then as we keep kind of elevating higher, people get more stubborn and more stubborn. And that’s what kind of leads to those moves to the upside because people are saying right now, you know, oh, we gotta go lower. You know how many times like I literally posted on my Instagram, okay. And I said, Yeah, I think the bottoms in there. How do you feel about that? Do you know how many DMS I got from from fucking degenerates? Who are like, this is going lower? Oh, you’re an idiot. way wrong way wrong, Harry. You’re an idiot. You know, when I get those types of DMS? I know I’m on the right track, at least. Yep. But you have people who are so passionate, that will go out of their way to DM you to say that you’re wrong.
James 7:09
It’s like crypto. Yep. Yep. 100%. Same idea. And yeah.
Harry 7:15
So they’ll just keep fucking chirping me and I’ll keep fucking money.
James 7:19
I think. I think the reality is that we know the Fed, basically crashed the stock market to try to curb inflation, right, and try to kind of reset things. Yeah. And I do think it was needed. I think, I think they did what they kind of had to do. You know, obviously, it hurts a lot of people. But the reality is everybody fell into the romance, that the stock market only goes up, and that everything was super easy. And it was the easiest job in the world. So I think now to most most people, no, inflation is here, right? Inflation is here to stay gold transitory idea, right thrown out the window. It’s here to stay. I think major companies like Apple. Who else was it that said they were slower hiring as Madoff has? Yep. And they were preparing for a potential market slowdown. Yeah, we call it a recession. But no one ever said that a recession has to be the worst thing in the world. No one ever said it has to be huge. Like oh, wait was brutal, right? Yeah. But it doesn’t have to be.
Harry 8:23
People didn’t expect people are like this now when they’re better prepared.
James 8:27
Exactly. What have we ever seen banks? Like like Jamie Dimon talking about how they’re preparing themselves for an economic hurricane? Right? Why would they be telling people that if they didn’t want everyone else to get caught off guard and screw themselves? Oh, yeah. So I just I kind of feel like this time around. It’s a much more controlled downturn. And what’s what kind of news could come out at this point? That would change that sentiment, right, because gas and oil slowly coming down, but it’s, you know, it’s gonna be expensive for bid. inflation’s here. We know markets are slowing. Yeah. What else is there? You know, there’s no pandemic coming out again, God, knock on wood kind of thing. You know, there’s nothing that’s going to change thing.
Harry 9:10
Well, except monkeypox, the who actually declared urgency yesterday. I said, I’ll be watching. for that. I’ll be watching the ticker.
James 9:20
Yeah, I think that’s gonna be a potential. You know.
Harry 9:24
You froze for a little bit up.
James 9:27
Can you hear me still? Yeah. That’s where, like I said, just you know, everyone on Twitter, super bearish, super negative.
What Would a Car Crash Do to Oil Prices?
James 9:35
And I feel like it’s the same as small cap trading, right. It’s like, you’re on the right. If you’re on the same side of the trade as every single person. It’s probably the wrong trade. Yeah, you know, so
Harry 9:46
100%. And I just wanted to transition because Graham Stefan has been tweeting pretty heavily about the whole auto industry collapse. And he says that nearly one in every four loans default in Washington, DC, as far as car loans go, which is pretty bad for the car, car industry. You know, if car loans were to kind of, I don’t know, if they were to like default or there was a crash, as far as you know, cars went in it, it caused the price of cars to drastically increase. What do you think that that would do? As far as ours price of oil?
James 10:28
Yeah, it’s funny. So I’ve kind of been following a bunch of these guys who have been tweeting about this. And I think it’s even worse than, than even the reference standard, or whatever he’s made it out to be. Because I was looking online, and I guess a lot of people, I think it was 18%, or some crazy number, I gotta get the actual number have to have our behind more than three months on their car payments. Now, I don’t know how that works. Because it because cars aren’t like homes. Right? So if if someone defaults in their car, it just gets repoed. Right there, someone’s gonna come take it, and then it’s gonna go to auction. Right? I think so. So I don’t think that would have an overall effect on the on the stock market. But I do think it would drastically flood the car market with like, supply, you know, because for the longest time right now, we’ve had, it’s been hard to get cars because of the chip issues. People have been buying them like crazy. And prices have skyrocketed. So if anything, I think it would do the opposite. I think there’d be a lot of cars now. And people would be hurting for it, though. So you could probably scoop up cars pretty cheap. But I don’t know what it would do to the overall market.
Harry 11:42
Yeah, that’s what I’m kind of wondering because it says auto loan delinquency rates continue to drop across the board 4% of outstanding auto debt is at least 90 days late. That’s down from 5.3 and 20 days in 2010, while another 5% are 30 days overdue. So it’s not, it’s not too bad. This was March 8 2022. So maybe we’re getting a little worse.
James 12:06
I know what that shows is that as a country, we are falling behind, right? Because I find now the middle class is starting to say more publicly, that they are struggling, right, being a middle class citizen making, you know, I don’t even know what middle classes in this country anymore. But whatever that number is not enough. Right? You know, and so anyone below that line, now, they’re the ones they’re screwed, you know, as things get more expensive, food gets more expensive. And if inflation stays the rate it is now and they continue to raise interest rates or, you know, the bug with the market a little bit. I mean, what’s gonna happen, we’re gonna get more of that. So like, I think the scary thing is just seeing that that number could go from, you know, 90 days late to 120 days late, or 50 days late. And then what?
Harry 13:02
I mean, you could really scoop up some cheap used cars, you know, seriously brands, like if we continue on this trajectory, it could be due for an 18% decline, you know, average new vehicle, like, prices in cars are insane right now. Yeah. I mean, they’re, they’re insane. So that needs a kind of a reset to so maybe everything. If if you know, they repossess all these fucking cars, and everyone kind of goes back to ground zero, maybe prices can kind of cool off and reset a little bit again. Yeah. And, you know, that might be some good news for people who want to buy a car.
James 13:39
Dude, I think. I think we’ve, as a country, we’ve just built up this lifestyle of like debt, right? I know, people who make $600,000 a year, but they’re driving around in a $1,500 a month car, and it’s just like, when you do the math of it. It doesn’t make sense. Yeah. So I bet a lot of the like, delinquencies are people who just overspent, it’s not even like, it’s like they were trying to stay within their budget. You know, they took the stimulus checks, and they’re like, Oh, I you know, I saved a lot of money during the pandemic. Let me go get a Tesla. Right. Yeah, I got a Tesla. That car payments, not fucking cheap. No, but I think people did that shit. Because they felt like kind of money was so good, right. And that’s kind of what we’re talking about now, is that things kind of need to reset. And I think the auto industry is it I actually recently was just looking at a secondary car. And I wanted just a car that kinda like beat around on and there was one of the new Ford Broncos was being sold at a themed BMW dealership next to my shop. I went over and they’re only asking like, 38k, right. And I was like, I drove it. I didn’t really like it as much as I thought I would. So I walked away. guy calls me the next day. Now it’s 44k calls me a week later, price went up to 49k and then it’s sold for like, 55,000 some new bought and I’m like, Dude, we don’t see The problem, like we’re buying cars for way over their value. So it’s the same as buying a house for over value, except people change cars way faster, when you’re gonna go sell that, you’re gonna be underwater, so you’re gonna be stuck in that toxic debt for the rest of your life. And it’ll take forever to get out of it unless you just basically lease out or something like that. I mean, and that’s what we’re doing with houses. So I think people just need to slow down on their spending, especially during times of like inflation and stuff like that. Because every little dollar is going to kind of save you, you know, it’s going to keep you from like, getting into these problems and these issues.
Canada’s Support for Ukraine
Harry 15:35
Yeah, and exactly right. I mean, if you look at at least when you buy a house, you know, normally you’re going to the value is not depreciating, like it is a goddamn Ford Bronco. I mean, in five years, how much is that Bronco going to be worth in 10 years? How much is that Bronco gonna be worth nothing? Yeah. So I mean, that’s, that’s pretty crazy. Speaking of all this spending a lot of Ukraine spending then going on? You know, I’ve been seeing a ton from the United States side, not as much from Canada, but United States has pumped a tonn of money into Ukraine. How do you guys feel about that?
James 16:14
I am. It’s funny. So my job. So I get to talk to a lot of people daily, right. So I would say most people are confused. Because we sit here all day long. We talk about how bad things are a country right now, we talked about how poverty is probably at all time highs. The wealth gap is at all time highs, cost of everything’s at all time highs, yet. Here we are as a country donating billions and billions of dollars to another country. Yeah, I personally, I do feel. Now this is as a political as possible has nothing to do with politics. I think we’re doing it to basically pat ourselves on the back. And like, say that we’re doing what we’re supposed to as the world leader. But the reality is, Ukraine doesn’t really stand a chance. In my opinion, we’re against Russia long term. And I think, again, we’re just doing this to kind of stay in the middle, but not overstepped too far into Russia. But I just don’t understand it. I don’t understand the spending, I don’t know, I don’t I feel as a country, we need a lot of help here. And we’re, we’re failing, you know, as democracy. And there’s a lot of problems.
Harry 17:22
And in Canada, we’ve spent around 3.4 billion in total financial and military support. And, you know, the Canadian government will say that they’re proud to lead the way. But also, we were we were working on this, this turbine for Russia. And we were working on it kind of before the whole the whole sanctions were put in, we were working on it, before Russia decided to quote unquote, attack or, you know, whatever, invade whatever, you know, you want to say. And, you know, we so we’re working on this, this pipeline, we put the sanctions in, and now Russia says, well, we want that back now. And you know, Canada’s like, well, whoa, you know, and they’re like, well, we’re not gonna give any gas to Europe, then if you don’t give us that damn turbine back. So what does Canada do? After we’ve invested 3.4 billion in total support, and we in the United States has spent a lot more money than that. And all of a sudden, what happens? We give it back, we defy our own sanctions. So, you know, that says a lot about about Canada as a whole. And also, you know, you can’t slant Trump, for when he went to the World Leaders Meeting and told Germany, listen, and told the other European countries, everyone was laughing at him in Germany, all the Germans were laughing at him. And he sat there and he said, Listen, you guys are relying too much on Russia, you’re relying way too much on Russia. You know, and when you rely too much on a country like that, they’re gonna take advantage of you. They all laughed at him, said he was crazy, said that would never happen. And boom, you know, we’re in the mess that we are now. And if we never relied on Russia at all, if, you know, we didn’t do business with Russia, we’d be completely fine. But, you know, the majority is a lot or the reality is, is that the majority of oil in Canada that was being pumped was not Canadian oil. Yeah, it was Russian. Right? It was from the Russians, and it was from the Saudis. You know, I was pumping my car in Canada with Russian oil, when Canada has a you know, a crazy oil reserves that we could be pumping right now. Oh, America. It’s just things that don’t make sense, right? Everyone was protesting for this whole climate agenda. And don’t get me wrong. I believe in climate change. It’s just that we have to do it in a responsible way. And just because we don’t pump the oil in Canada does not mean that it makes a you know a difference if we get it from Russia or Canada. or the United States or the Saudis, it’s still the same amount of pollution going in the air, people are still driving their cars, people aren’t right now moving to, you know, a renewable source. And even these electric cars are not necessarily, you know, renewable sources, right? Yes, we’re, we’re plugging it in, and we’re not, you know, getting it from from and we’re not putting gas in our car. But you know, how do we make that power? You know, let’s go another step further, how are we making that power pollution? So we’re still polluting either way? And when, and when, like, three to four times the carbon emissions are being pumped in just to make one of those cars. It’s like, does this make actual sense?
James 20:42
Yeah, no, it did.
The Cost of Gas and Oil
James 20:43
I think the biggest issue is as countries like the bigger ones, right, like US, Canada, China, and all that. We are major consumers, right? And we’ve come so far to expect things to always be very easy, very cheap. And kind of whenever we want it, we can get it right. So morals take a backseat, because look at this whole Russian thing, right? If the cost of gas keeps going up, right, because we’re denouncing taking Russian oil or from other any other foreign agencies, like the Saudis, and whatever, the cost is gonna go sky high. And if the cost of oil goes sky, and gas goes sky high, everything else goes with it. Vacations, rentals, is so much gets hurt cars, all of it, right. So at the end of the day, I kind of feel like, as bad as it is what Russia is doing, which is awful. Our countries are going to continue to do business with them. We’re going to we’re going to have to, because in America, at least, that’s all people complain about, for some reason, the cost of gas, because it maybe is because the biggest day to day like expense that you touch besides food. It’s all I hear, but it’s all I hear about and how it affects things. So I don’t know personally, I’m not a huge believer that electric vehicles are going to be like the next big step, the next step, or the next big step, I think oil is here to stay for a long time. I personally, like recently just bought a small basket of like oil stocks. Because of that reason, I think we’re still 100 years away from being fully electric. We don’t have the infrastructure. We don’t even know about actually recycling the batteries and how much damage that does. Yeah. And on top of it. What is the average electric car cost? I mean, not a hybrid, a fully electric car, it’s gotta be over 50k that like, minimum, right? The Lucid is 150 138, or something like that, in Tesla start at like, call it 40 or 50. Around there, the average person can’t afford that. And we’re not even close to that. So as the economy gets worse, people aren’t gonna get have the money to go buy a, I don’t know, whatever the cheapest electric car is, it’s not going to happen.
Harry 22:56
Yeah, I mean, also, like, you know, it does, like when you drive a Tesla, like how much of it is status, like, how much of it is like the same thing as buying? Or buying some new Gucci slides or whatever, right? You know, I heard this this funny joke last night, it was funny, where this woman said, met a bunch of guys from Harvard yesterday, and I kept pretending like, I never heard of that school just to piss them off. And she goes, one of them legit turned red when I said Harvard, what is that, like a local community college? And then the woman comments below it, she said, reminds me of my coworker who whenever she sees a Tesla at the gas station or something, she’ll look over and go, Wow, the new Toyotas look really cool. And the drivers freak the fuck out? Which is hilarious. Because Are you driving for the planet? Or are you driving for status? Right? You know, maybe you can say, well, I’m saving the planet. But I think a lot of people are driving as you know, for a status symbol.
James 23:52
Yeah. And it’s because it’s fucking expensive. Just recently, I was like, my buddy was looking at the Model X. And one set you came want, like, the nice ones like 120,000? You know, again, it’s nice car, but majority of Americans not going to afford that, you know, especially now, you know, savings and everything at all time lows. So if people don’t care about the environment, when their day to day life sucks, right? If they’re struggling to get food, struggling to get to work, save money, they could give less of a shit about the environment, which is not great. But that’s the reality.
Harry 24:31
What did i What did I also say? I’m just trying to look it up. I saw something about like a healthy economy and a healthy environment. You know, if you have, you know, a very, very healthy economy, it does translate to a healthy environment, just due to the fact that you know, you know, if people have money in the bank, maybe they will say, Okay, I’m going to put this towards have incentives to help the environment, right? People who are lower class tend to be harder on the environment, just due to the fact that like, what types of foods are they eating? Is it going to be fresh foods? Or is it always going to be coming from a package? What types of, you know? Like, how, how much are they driving? Right? Do they need to drive to work every day? You know, as far as kind of, like, how much are they? Are they going through products? You know, are they recycling? Well, probably not. Because they can’t go to a bottle depot to cash in their 10 cent two bottles, right? So there’s all these little things that trickle down where you wouldn’t really think about it. So for me, I think a healthy economy, a healthy environment go hand in hand. Also, I just want to bring up one thing you can and I was listening to this other podcasts the other day, and they said that he so he’s a mortgage broker, he’s out of Halifax. And he said that, you know, before his like, before, the pandemic, before the housing values really, really took off. About 30 to 20% of his business was these like reverse mortgages, right? So when people take the equity out of their house, and like, basically take like a new mortgage, or whatever, right, but now that houses have risen so crazy, a lot of people are taking the equity back out of their house and doing these new finance deals, right. So like, let’s say that your house is worth 600k, right? And you get a mortgage for 600k. And now, it’s worth 800k, they’ll give you that 200k difference, right to kind of reverse that mortgage, they’ll give you that 200k You take on that 200k more debt, but at the end of the day, when you quote unquote, sell your house, well, we’re gonna get that money back anyway, so it doesn’t matter. But I was thinking myself, like, what if the housing market drastically falls and in prices, right? If he went from 20 to 30, now he’s doing it’s like over 50% of his business, or the you know? Yeah, I mean, to me, that could be that could be a real, you know, reason for a crash?
We’re Just Consumers
James 27:11
Well, I guess, I guess that’s what we circle back to is that we are just consumers, my my dad, he builds kitchens and baths and like home right? Now, he’s never been busier, this guy has been in business for 35 years. And he’s done well, but he’s the busiest he’s ever been. How does that make sense in a time where we’re in a quote unquote, recession or a market slowdown, right? It’s kind of what you’re saying, people are pulling out money, because they feel that things have been so good for so long, right? It’s the same concept. Like let’s say, when Tesla was trading at $1,000 a share, you could have taken a loan out against your Tesla stock, and then use it as long as it didn’t drop. It’s the same, same idea, same thought, now with housing, it’s gonna have it of course, it’s gonna happen, right? It has to happen, because 99% of people I know, can’t afford a house right now. They can’t buy a house at these prices. They can’t put down 10% Or even do the first time homebuyers. It’s, it’s not going to end well. Right. But I still think we’re a little bit of ways away from it. That’s why I like stock market wise, I do feel like we’ve bottomed and I feel like we’re gonna slowly grind around for a little bit. But q1, q2 of 23, we might start to see a different story. You know, that’s when we might see some economic collapse.
Harry 28:34
Yeah And I also think that I don’t think that they’ll let everything go at once, I think every, every market will take its turn. So stock market was first, it could be the bond market, after a lot of people have been talking about the bond market, it could be a big bond crash as well. But I don’t think that everything will go at once, if everything goes at once, it will be utter chaos, right, they’re gonna do the soft landing and whatever. So I think it’s going to be maybe the housing market and the auto market and, you know, just general prices, oil, whatever you want to see, it’s going to be different assets. You know, in my opinion, you know, each, each different thing will take its turn, I don’t think it’ll be all at once. But even you have, like, people who are heads of the bank saying, it’s time for a little bit of a reset, it’s time for a little bit of a crash, they’re gonna do they’re gonna keep hiking those rates until they get that it’ll be a Fed induced crash. But in my opinion, you know, it’s okay for me like, it’s all right, because right now, I don’t own a house. You know, I’m in an apartment right now. So maybe it will be good for me when, if the interest rates are high, though, like, it’s different, because like, for someone like me, if you have cash, you can put cash into that. Well, the high interest rate doesn’t bother you. But if if those high interest rates bother you, you know it’s going to be the same price kind of either way, just different different, you know, payments. You know, like, so right now we have very, very expensive houses, you know? Yes, the rates are climbing a little bit, but the rates are still generally low. But okay, let’s say we have low equity. Yes, the housing market has quote unquote, crashed. But we still have insanely high interest rate payments on those on those low house’s. So, you know, are you really like I hear all these people? Oh, yeah, I’m buying the debt, buying the debt, buying the debt? Yeah, yeah, you’re buying the debt, but at a crazy fucking high interest rate. So unless you have cash, you’re pretty much screwed on this hip as well.
We’ve Been Through This Before
James 30:31
Yeah. And look, we’ve been here before, right? If you look at like history, we’ve been historically way higher, right? I mean, we were at 12%, I think I was my parents first mortgage was like, 1212, nine, right. And I understand the argument of, you know, the houses were different prices back then, and blah, blah, blah. But the reality is, we’ve been here before. And I was listening to the Berkshire Hathaway, the last annual meeting. And Buffett basically said that, you know, you can say what you want about him, but he basically said, We have to trust the Fed to do what they were created to do. And it’s gonna, it’s gonna hurt for a bit. But we need to stay on top of our like currency and make sure that we’re not screwing ourselves over, you know, which kind of cycles beats my next talk subject. I wanted to bring up real quick. Did you see that article? I think it from QTR. He was saying how Russia and China basically have announced a new global currency. Yeah, right. And that’s scary. That’s scary. Because the reason the dollar has been so strong, and we’ve been able to borrow as much money as we can, and have is because we’re the global reserve currency. Yeah. Now, what do you think changes? If that? Turns around?
Harry 31:47
That is something that a country will go to war over? Right, for that status? That is very, very important. You know, for me, I think, yeah, if that happens, the United States dollar will be in for a fucking tumble. And it will not be good for the US consumer. Not at all. I mean, I think that, you know, could you imagine that it’s Russia and China global reserve currency with the Saudis, you know, the United States would be left out, you know, that would be a very, very, very big mistake to let that happen. And how do you even go about getting that back? You don’t like not for a while, not for 6070 more years, you can’t borrow as much money as you can. Your dollar is a lot weaker. You’re in inflation, you know, situation right now. That would be very, very, very scary for United States, Canada, Mexico, everyone on this side of the globe, that would be very, very, very scary. If that was something that would happen. But at the end of the day, there’s so much fucking corruption that it just won’t, it just fucking won’t happen because someone’s going to pay someone here to pay someone there to pay this to pay that. And it’ll all just fucking go away. Because at the end of the day, what the fuck has Russia fucking created? Please tell me, please tell me has Russia created Facebook? Instagram, Twitter, social media. Did Russia create the fucking telephone? Or the light bulb? No. So do I believe that they can create their own currency? absolutely fucking not. Unless it comes out of the goddamn ground there. They are not going to create a goddamn single thing.
James 33:11
China, China scares me. I think John, it scares me. Yes, China became the way they are. Because they’ve stolen a lot of information. They’re good at it. I mean, they’ve had the programmes where they send people here into our, into our country, and they go to our schooling systems, and they basically get jobs and government and education and they report back. And they are able to steal information from us at faster rates than we ever could. So the reality is, we rely on them so much, they continuously by our farmland, they continuously get deeper and deeper into our economy. And I think they’re close enough to that point where they can just shut us off like that, and would be in big trouble. You know, I part of me wishes America would kind of just take its footing back and try to rely on itself again, things would get more expensive. But that was the whole idea. I guess Trump was into not saying I like him or not, but he was saying like America first, you know, bring things back to America. And let’s be self reliant again. You know, what, we changed so much in the last 100 years, we rely on other countries to supply us with these stupid phones and like all of our shit, you know, and it’s not gonna get any better. It’s only gonna get faster. So those things kind of scare me.
Harry 34:27
Yeah, I think it’s, it’s pretty wild. It also I think that you know, what did I read that the United States sold a bunch of their oil reserves to China and Hunter Biden OWN THE FUCKING company like, the thing is, is that there’s just this level of corruption everywhere that that that like, you know, we’re just gonna keep seeing and keep seeing people are going to get madder and madder and madder at the fucking system, which is not good for the US either. Right? Nancy Pelosi we see her making all these trades. She’s in the government. She’s getting off scot fucking Free, right? You see stuff like that, you know, well, obviously that’s not really going to be reported on in the states necessarily, but like, you know.
James 35:09
The Chairman, what the new SEC chairman was, like, her student or something like that some crazy connection? It’s like, well, no shit. There’s no inquiries or trades or $20 million positioning video.
Harry 35:22
Yeah, exactly. And people just see that and get madder and madder and madder at this system, that’s not healthy, and it’s not good. And the thing is, is that, you know, I tweeted out the other day, like, Fuck taxes, make corruption accessible for all. Because at the end of the day, if you’re able to kind of get a little bit of a one up, you know, you won’t really care about paying those taxes, you know, if you’re able to fucking drive down the road at a fucking in I’m not saying this is necessarily right, I’m just saying that people get angrier and angrier when, you know, they see a fucking Crown prosecutor pulled over for going 30 over the limit. And then he just gets let go because of the Crown prosecutor, right? That makes people angry. Right? And so if you’re going to keep taunting people and keep making people angry, you know, that you’re at some point, there’s going to be a boiling point with these trades that, you know, Congress are doing and it’s on both sides, Republican, Democrat, they’re all banking off these fucking trades, you know? And so yeah, that’s why when I tweeted, I was like, you know, what, if you’re, if you’re going to say that we’re an honest and fair country, but your leaders in charge are not doing honest and fair things. That’s a recipe for disaster. And that’s a recipe for collapse on the on the political side, you know.
Principles for Dealing With the Changing World Order
James 36:35
If you ever get a chance Everyone should listen to it’s a it’s a YouTube video. There’s a couple of them, but one of them is called Principles for dealing with the changing world order. Ray Dalio, right. And there’s a few in there, you can get yourself into like a little bit of a world pool of like, Oh, look at all these videos. But he does a great job of explaining it, because he’s basically saying, as a country, what you’re saying, we’re getting to the boiling point where people are so fed up and pissed about how unfair this of the world has become. And I say unfair with quotes. But how big of the wealth gap has got how people get away? The the people who have get away with everything, the people who don’t have, they get screwed? So the boiling point, unfortunately, goes to civil wars, civil unrest, people getting very upset. And that’s kind of how, like empires fall. You know, that is we are at the kind of the back end of our lifespan as an empire. Yeah, you know, and he kind of explains that, like, it’s really hard to fix. It’s a little depressing, but, you know, it’s good to listen to and it’s good to know.
Harry 37:41
Well, and also, I just want to mention one thing, we can talk about this and then we can kind of go into small caps and maybe start to wrap it up. But you know, there’s been I don’t know if you’ve seen it with like, the World Economic Forum and stuff like that. But basically, I don’t know. I think I believe it’s the Dutch farmers or whatever. They they had a ban on all their their fertiliser. So basically, you know, in that part of the world, their government said to the farmers, you’re banned from using fertiliser now at all. So it’s like, basically, how can I grow crops? Right? Yep. Now in Canada, okay. They are also doing tariffs on fertiliser. It’s all for the quote unquote. You know, it’s all for this green energy green change. You know, you don’t use fertiliser, because you know, we’re gonna go green, and we’re gonna get our food from somewhere else. But we’re going into a food shortage. This makes no sense. However, a tonne of food plants that are burning down, just randomly burning down 10,000 cattle that just dropped that randomly from a quote unquote, heatwave. Now they’re banning fertiliser in the Netherlands. They’re, you know, pretty much trying to ban fertiliser in fucking Canada. You know, that is scary when we’re talking about food shortages already. And now you’re trying to cut off this food supply. And then we see, you know, our favourite Prime Minister Justin Trudeau. Who is investing in insects. Yeah, I mean, what is that he’s investing in insects. Invested 8 million in an insect programme and edible insect programme. I don’t want to eat a chocolate fucking cricket. I’m sorry, bro. Just not something I want to eat. You know, the thing.
James 39:32
That’s this is the only thing that scares me is that we’re just at a point where there’s a lot of confusion. Like I think Charlie Munger actually said it begs ease. Like, if you’re not confused by everything going on right now, then you’re not doing it. Right. Something like that. You know, just everybody’s confused. There’s no one except for the people that are in the know, right? Like the highest level of government. We don’t know. So the best we can do day to day is Just Be the best version of ourselves and be, you know, be smart financially for ourselves. That’s all you can do, you know, and I think people overstressed it and it’s just, all we can do is go with the flow at this point, we’re not going to change the course of history, we’re not going to change anything.
The Current State of the Small Cap Market
James 40:16
You know, it’s just, it’s tough. It’s tough to sit here even talking about these topics, because it’s crazy. You know, never in our Platinum, did we think we’d be talking about shit like this, you know, I thought we’d always be talking about like, small calves. And you know, and what that means for us. But wait, I guess we could actually transition into we should talk about we should hit on that. But the students picking up this small cap markets been talking awesome. Lately, I think. I think that it shows that confidence is back in the market a little bit. Right. That’s kind of goes north pieces about the overall market, bottoming. You know, we’ve seen some nice volume, and we’ve seen some nice fades some nice trades on both sides of the aisle.
Harry 40:56
Yeah. of the aisle. Yeah, yeah. The frigging small cap Congress. Yeah. Yeah, no, I think that it’s definitely been picking up, I love it. Great volume, there’s been a trade for either side on each day, you just have to be very, very picky with how you kind of go about things. And you have to be, you know, very, very, very selective and what you’re trading and, you know, if you’re a short trader, and you’re going after stocks, making new highs in this market, you are going to get wrecked. I mean, we saw it. We saw it on Friday. And we’re just gonna keep seeing it, I think. But if you are kind of shorting those kinds of broken stocks, you are going to get rewarded. And as well, if you’re a long trader, and you’re saying, Hey, man, how can I kind of go about, you know, making some good money, it would be going after the stocks making new highs and not longing broken stocks, you know.
James 41:59
That multi day, I think, you know, now it’s, it’s kind of back to trading the hot chick, which for the last, like, I want to say, six months, we’ve been talking about this. Hot chicks have kind of sucked. But now shorts have gotten a little caught off guard. And it’s funny, because a lot of my focus now is stocks that are making new highs, right? Whereas before, it’s like they were so weak. And any stock that didn’t make a new high, there was confidence that it wasn’t gonna crush you. So yeah, especially on the short side, right now, you really need to focus on the stocks that are making new highs and make sure you’re identifying like solid range. Everybody’s like, Oh, I lost on this stock. I’m like, Dude, you’re shorting lows on a stock that’s up 18% It just looks like it runs because it’s running pre market, but you can’t be chasing that shit. You know, shorts, it’s getting they’re getting killed, right and right now Long’s are a little bit more forgiving. They can chase a little bit more. And they’ve been okay.
Harry 42:56
Yeah. And I think also, if you look at kind of overall market strength, like, it’s kind of nice, like we have the the spy starting to rebound a little bit. I’m not saying that, you know, we’re going back. We could be in a sideways channel for a little bit, I just think it’s very nice seeing the overall markets are kind of starting to get a little stronger. Again, we’re starting to see some nicer days. And it’s by it’s kind of transitioning over to the small caps a little bit. We’re starting to see the hot chicks pick up we’re starting to see the multi day runners hanging around where the last like three, four months, it was hard to find a good multi day runner, there would be new stocks every day. Now we’re kind of seeing the same socks kind of come over again. At like, see do stuff like that they’re holding up. So that is good for the small cap market.
James 43:45
Yeah, I’m happy, like and trade has been going well, so.
Harry 43:49
So anyway, I think we can probably start wrapping this up.
James 43:54
Last thing I wanted to do before we actually wrap it up. I started to some other podcasts and I actually loved it. So I want to do favourites. So give me something you’re reading watching doing right now. That is kind of like taking your attention.
Harry 44:08
Yeah, yeah, no, I completely agree. Yeah, let us know when the kind of comments below what you’re watching any books for us that you think we should read? James and I both like to read any, you know, any podcasts that you think that we should watch that we could kind of do to make things better? Or any articles as well link them down below. Like we’re always down and open to discuss new topics. So
James 44:31
what do you want?
Harry 44:34
I think with that, we can start to wrap it up, James if you have anything else to kind of mention.
James 44:39
No, I was just saying what are you watching? Watching?
Harry 44:43
I’m not really watching anything right now, to be honest. I’m rereading a couple books that I had read kind of before like Market Wizards and a couple of like psychology books like that. But I’m not really I’m not really kind of, I’m not as much as Like a podcast listener as I should be, you know, I, I’d like to read and I like to kind of, you know, obviously if I’m on like tick tock I like listen to podcast clips through there and stuff like that. But I’m not like, it’s hard for me to sit down and listen to a whole podcast because I’m like, Oh, I could be reading or I could be doing this or I could be doing this. Maybe if I could combine the two.
James 45:21
Yeah. So I get stuck driving. So I want to put one recommendation out there. podcasts on Apple podcasts. It’s called. We study billionaires, the investors Podcast Network. I have been crushing this podcast. It’s fantastic. Absolutely great. Listen to especially anything macro. They a lot of long term investing as well and Bitcoin too, so definitely give that a listen if you get the chance.
Harry 45:46
Yeah, awesome. All right. So I think we’re gonna wrap up there. Thanks, James. And, buddy. Yeah,